Here’s a quick look into Canadian home sales for the month of July!

Summary:

• Home sales surged again in another sign of Canada’s buoyant ongoing rebound from COVID-19 lockdowns.
• New listings registered their strongest-ever month of July in 2020.
• Existing home sales reached their highest level in any month in recorded history.
• Canadian home purchases rose by 26%, while new listings climbed by a healthy 7.6%.
• National sales-to-new-listings ratio to 73.9% (sa)—the highest since 2002 and tilted in favour of sellers.
• MLS Home Price Index  rose by 7.4%

Sales:

• Canada’s largest centres tended to witness the steepest sales increases.
• Purchase volumes were up by more than 40% in both Toronto and Vancouver.
• 39% advance in Montreal.
• Ottawa, Southern BC and the Greater Golden Horseshoe also enjoyed strong sales.
• Purchases were up in Saskatchewan and Alberta as well, but at a more moderate pace.

Price Growth:

• HPI gains were positive in most centres, especially in larger metropolitan areas.
• Greater Golden Horseshoe maintained price growth of more than 10% y/y.
• Ottawa (+18% y/y), Montreal (+14% y/y), and Moncton (+12% y/y) posted record growth in home prices.

Implications:

• Solid gains were expected as most regions entered the final stage of reopening in July and following early releases

from local real estate boards, but the strength of the rebound continues to surprise.

• Nationally, both unit sales and new listings have surpassed pre-virus levels, with purchases now a hefty 17% higher than five months ago.
• The effects of more stringent mortgage conditions introduced by the CMHC on July 1st may eventually dampen mortgage demand, though there is little evidence of that to date.
• Potential downsides to the outlook remain very much at play, including:

a second wave of the virus, persistent weakness in population growth, and risks related to timing the withdrawal of mortgage and tax payment deferrals. These factors could undermine continued gains in the housing market as well as the recovery in the broader Canadian economy.